High street cull as 136 firms disappear

The Solicitors Regulation Authority has made public the names of 136 firms which it claims have lost the right to practise as solicitors because they did not obtain professional indemnity insurance by the deadline.

Firms that did not obtain insurance cover by 1 October entered the Extended Policy Period band were given 90 days to secure cover, or face immediate closure on or before 29 December.

The list includes Grants Solicitors of Croydon, the firm set up by the former justice minister Helen Grant and Alastair J Brett of London, the firm set up by the former legal director at The Times newspaper. In all, 23 of the firms are in London.

In Liverpool, listed casualties include conveyancing and PI firm JST Lawyers, which had 20 fee-earners.

According to the regulator, 'In the majority of cases the firms closed in an orderly manner, dealing appropriately with client files and monies.' The SRA said a 'small number' of firms failed to close properly and are subject to ongoing 'robust' action.

Inclusion on the list does not necessarily mean firms failed to receive one or more quotes for insurance cover.

In a statement, The Law Society stressed that the SRA's list would have been longer but for the introduction of the EIP, for which Chancery Lane lobbied. A small number of firms failed to close properly and are subject to robust action, it added.President Nicholas Fluck said: 'There will be a number of reasons why firms have closed and some of these will have been positive decisions by the partners involved. However, thanks to the EIP many firms were able to find insurance and continue practising.

'In addition to lobbying for the EIP, the Society offered support and guidance to firms facing closure, a process which can be very distressing. We also urged the SRA to manage closures in an orderly fashion.

'Ultimately, the requirement for PII is a major public protection measure, Last year's experience of the failure of the insurer Balva, which left many firms without insurance, brought home the importance for firms to be confident of the stability of their insurer.'

Frank Maher, partner for Liverpool firm Legal Risk, said the fear is now that the 2014 renewal period will be even tougher for smaller firms.

'I had two calls this morning from firms who got over the last renewal despite problems but now have other claims issues to contend with and fear they will not survive again.

'One or more insurers who were there this time may be there for October, but I am concerned they will not be there for much beyond that. Concerns have been expressed to me in the market about two in particular.'

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